Interest Subvention Scheme 2013-14 for Farmers


As directed by the Government of India and in pursuance of the budget announcement made by the Finance Minister relating to the Interest Subvention Scheme 2013-14, Interest subvention of 2 % p.a. will be made available to Public Sector Banks (PSBs) and Private Sector Scheduled Commercial Banks (in respect of loans given by their rural and semi-urban branches) on their own funds used for short-term crop loans up to Rs.3,00,000/- per farmer provided the lending institutions make available short term credit at the ground level at 7% per annum to farmers. This amount of interest subvention will be calculated on the crop loan amount from the date of its disbursement/drawal up to the date of actual repayment of the crop loan by the farmer or up to the due date of the loan fixed by the banks whichever is earlier, subject to a maximum period of one year.
Besides, additional interest subvention at3% will be available to the prompt paying farmers from the date of disbursement of the crop loan up to the actual date of repayment by farmers or up to the due date fixed by bank for repayment of crop loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This also implies that the prompt paying farmers would get short term crop loans @4% per annum during the year 2013-14. This benefit would not accrue to those farmers who repay after one year of availing such loans.
Further, in respect of KCC Scheme, the GoI has clarified that loans granted only out of the following six categories are covered under the Interest Subvention Scheme, which should be computed and segregated accordingly for claiming interest subvention :

  1. To meet the short term credit requirements for cultivation of crops

  2. Post-harvest expenses

  3. Produce Marketing loan

  4. Consumption requirement of farmer household

  5. Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery, etc.

  6. Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals, etc.

The benefits of interest subvention will also be available to small and marginal farmers having Kisan Credit Card for a further period of up to six months post harvest on the same rate as available to crop loan against negotiable warehouse receipt for keeping their produce in warehouses.
Banks are to give adequate publicity to the above scheme so that the farmers can avail the benefits.

Friday, 14th Mar 2014, 07:32:02 PM

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